As a result of applying the modified retrospective method to adopt Topic 606, the following adjustments were made to the opening balances of the Condensed Consolidated Balance Sheet accounts:



Condensed Consolidated Balance Sheet (in millions)	As Reported March 31, 2018			Adjustments Due to Topic 606			Adjusted April 1, 2018
Assets
Current assets:
Cash and cash equivalents	$	3,405		$	—		$	3,405
Trade accounts receivable, net	793			9			802
Contract assets	—			772			772
Other current assets	210			(38		)	172
Total current assets	$	4,408		$	743		$	5,151
Property and equipment, net	237			—			237
Goodwill	6,804			—			6,804
Capitalized software and other intangible assets, net	1,111			—			1,111
Deferred income taxes	346			(221		)	125
Contract assets	—			159			159
Contract costs	—			427			427
Other noncurrent assets, net	154			(19		)	135
Total assets	$	13,060		$	1,089		$	14,149
Liabilities and stockholders’ equity
Current liabilities:
Current portion of long-term debt	$	269		$	—		$	269
Accounts payable	85			—			85
Accrued salaries, wages and commissions	242			—			242
Accrued expenses and other current liabilities	340			(8		)	332
Deferred revenue and advanced payments	2,289			(1,067		)	1,222
Taxes payable, other than income taxes payable	55			—			55
Federal, state and foreign income taxes payable	41			170			211
Total current liabilities	$	3,321		$	(905	)	$	2,416
Long-term debt, net of current portion	2,514			—			2,514
Federal, state and foreign income taxes payable	311			110			421
Deferred income taxes	111			80			191
Deferred revenue and advanced payments	820			(291		)	529
Other noncurrent liabilities	88			—			88
Total liabilities	$	7,165		$	(1,006	)	$	6,159
Stockholders’ equity:
Preferred stock	$	—		$	—		$	—
Common stock	59			—			59
Additional paid-in capital	3,744			—			3,744
Retained earnings	6,971			2,104			9,075
Accumulated other comprehensive loss	(290		)	(9		)	(299		)
Treasury stock	(4,589		)	—			(4,589		)
Total stockholders’ equity	$	5,895		$	2,095		$	7,990
Total liabilities and stockholders’ equity	$	13,060		$	1,089		$	14,149

In connection with the adoption of Topic 606, the Company increased its retained earnings by approximately $2,104 million. This increase was a result of a decrease in deferred revenue of approximately $1,358 million and the establishment of contract assets of approximately $931 million for amounts that would have been recognized under Topic 606 prior to April 1, 2018. In addition, upon adoption of Topic 606, the Company capitalized contract costs of approximately $427 million relating to commissions incurred to obtain customer contracts. Refer to Note 2 “Revenue from Contracts with Customers” for additional details on contract costs.

The net change in deferred income taxes of approximately $301 million and income tax payables of approximately $280 million is primarily due to the current and deferred tax effects resulting from the aforementioned items.

In addition, the Company made other changes, primarily due to professional services, to our Condensed Consolidated Balance Sheet on April 1, 2018 to comply with Topic 606.

The following table compares the Condensed Consolidated Balance Sheet at June 30, 2018 to the proforma amounts had the previous standard of Topic 605 been in effect:



	At June 30, 2018
Condensed Consolidated Balance Sheet (in millions)	As Reported under Topic 606			Proforma as if the previous accounting of Topic 605 was in effect			Effect of Change Higher/(Lower)
Assets
Current assets:
Cash and cash equivalents	$	3,328		$	3,328		$	—
Trade accounts receivable, net	525			523			2
Contract assets	797			—			797
Other current assets	112			164			(52		)
Total current assets	$	4,762		$	4,015		$	747
Property and equipment, net	222			222			—
Goodwill	6,792			6,792			—
Capitalized software and other intangible assets, net	1,044			1,044			—
Deferred income taxes	121			336			(215		)
Contract assets	117			—			117
Contract costs	408			—			408
Other noncurrent assets, net	128			145			(17		)
Total assets	$	13,594		$	12,554		$	1,040
Liabilities and stockholders’ equity
Current liabilities:
Current portion of long-term debt	$	270		$	270		$	—
Accounts payable	87			87			—
Accrued salaries, wages and commissions	201			201			—
Accrued expenses and other current liabilities	324			334			(10		)
Deferred revenue and advanced payments	1,108			2,070			(962		)
Taxes payable, other than income taxes payable	31			31			—
Federal, state and foreign income taxes payable	133			—			133
Total current liabilities	$	2,154		$	2,993		$	(839	)
Long-term debt, net of current portion	2,510			2,510			—
Federal, state and foreign income taxes payable	309			199			110
Deferred income taxes	179			105			74
Deferred revenue and advanced payments	481			738			(257		)
Other noncurrent liabilities	100			100			—
Total liabilities	$	5,733		$	6,645		$	(912	)
Stockholders’ equity:
Preferred stock	$	—		$	—		$	—
Common stock	59			59			—
Additional paid-in capital	3,699			3,699			—
Retained earnings	9,134			7,125			2,009
Accumulated other comprehensive loss	(440		)	(383		)	(57		)
Treasury stock	(4,591		)	(4,591		)	—
Total stockholders’ equity	$	7,861		$	5,909		$	1,952
Total liabilities and stockholders’ equity	$	13,594		$	12,554		$	1,040

The following table compares the Condensed Consolidated Statement of Operations for the three months ended June 30, 2018 to the proforma amounts had the previous standard of Topic 605 been in effect:



	For the Three Months Ended June 30, 2018
Condensed Consolidated Statement of Operations (in millions)	As Reported under Topic 606			Proforma as if the previous accounting of Topic 605 was in effect			Effect of Change Higher/(Lower)
Revenue:
Software licenses and maintenance	$	870		$	978		$	(108	)
Professional services	68			74			(6		)
Total revenue	$	938		$	1,052		$	(114	)
Expenses:
Costs of licensing and maintenance	$	76		$	76		$	—
Cost of professional services	70			73			(3		)
Amortization of capitalized software costs	60			60			—
Selling and marketing	235			225			10
General and administrative	104			103			1
Product development and enhancements	162			162			—
Depreciation and amortization of other intangible assets	26			26			—
Other expenses, net	103			108			(5		)
Total expenses before interest and income taxes	$	836		$	833		$	3
Income before interest and income taxes	$	102		$	219		$	(117	)
Interest expense, net	20			20			—
Income before income taxes	$	82		$	199		$	(117	)
Income tax benefit	(84		)	(62		)	(22		)
Net income	$	166		$	261		$	(95	)

Basic income per common share	$	0.40		$	0.62		$	(0.22	)
Basic weighted average shares used in computation	413			413			—

Diluted income per common share	$	0.40		$	0.62		$	(0.22	)
Diluted weighted average shares used in computation	415			415			—

The following table provides a summary of the Company’s revenue amounts under Topic 605 for the three months ended June 30, 2018 and 2017 in a manner consistent with its presentation prior to the adoption of Topic 606. Refer to Note 1, “Accounting Policies,” for additional information on the current year reclassification.



	For the Three Months Ended June 30,
(in millions)	2018		2017
Revenue:
Subscription and maintenance	$	838	$	817
Professional services	74		75
Software fees and other	140		133
Total revenue	$	1,052	$	1,025

The adoption of Topic 606 had no impact on the Company’s net cash provided by operating activities. The impacts of adoption resulted in offsetting shifts in cash flows throughout the components of net income and various changes in working capital balances. The following table compares the operating activities within the Condensed Consolidated Statement of Cash Flows for the three months ended June 30, 2018 to the proforma amounts had the previous standard of Topic 605 been in effect:



	For the Three Months Ended June 30, 2018
Condensed Consolidated Statement of Cash Flows (in millions)	As Reported under Topic 606			Proforma as if the previous accounting of Topic 605 was in effect			Effect of Change Higher/(Lower)
Operating activities:
Net income	$	166		$	261		$	(95	)
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	86			86			—
Deferred income taxes	(3		)	(1		)	(2		)
Provision for bad debts	—			(1		)	1
Share-based compensation expense	33			33			—
Other non-cash items	3			3			—
Foreign currency transaction (gains) losses	(5		)	1			(6		)
Changes in other operating assets and liabilities, net of effect of acquisitions:
Decrease in trade accounts receivable	262			257			5
Increase in contract assets	(6		)	—			(6		)
Decrease in contract costs	11			—			11
Decrease in deferred revenue and advanced payments	(148		)	(260		)	112
Decrease in taxes payable, net	(179		)	(159		)	(20		)
Increase in accounts payable, accrued expenses and other	44			45			(1		)
Decrease in accrued salaries, wages and commissions	(36		)	(36		)	—
Changes in other operating assets and liabilities, net	34			33			1
Net cash provided by operating activities	$	262		$	262		$	—